Growth Of Metro Rail Network In New Cities To Be A Huge Opportunity For Construction Sector: ICRA

Metro Rail projects in India have picked up and are likely to provide sizeable opportunity over the next three to five years to construction industry, rating agency ICRA said in note.

India plans to develop metro rail projects in over 30 Indian cities. Currently, the metro rail network is operational or partly operational in nine cities and another five cities have under-implementation metro projects.

“Roads and urban infrastructure, including Metro Rails are two key segments which have witnessed robust order inflows for the construction companies. Further, with sizeable pipeline of projects in these segments, the construction sector is expected to have sufficient order inflows and companies with strong track record and healthy balance sheet are expected to exhibit strong growth going forward,” K. Ravichandran, Senior Vice-President and Group-Head, Corporate Ratings, ICRA, said.

Metro rail projects will be developed in another 15-20 cities. ICRA estimates that the overall cost of expansion of operational and under implementation approved metro projects is over Rs 2.5 lakh crore, thus supporting the order books of construction contractors. Metro Rail projects worth another Rs 2 lakh crore are in various stages of approvals and are likely to come up for bidding within the next five years. This is expected to boost the order book of construction companies by Rs. 75,000-90,000 crore over the next three to five years.